Seesaw economic performance continues

The BankservAfrica Economic Transaction Index (BETI) for September highlights the continuing fluctuation of the South African economy after economic transactions in the overall payment system declined 0,7% after a very strong increase of 1,5% in August.

“The contrasting performances between August and September are worrisome for economic actors, as planning in a volatile economy are not just difficult, but near impossible,” says Mike Schüssler, Chief Economist at Economists dotcoza.

The BETI, which gives an economy-wide view of activity across South Africa, indicates that the continued economic volatility continues to hamper investor confidence.

Schüssler points out that the near constant declines and increases each month highlight that the economy is in uncertain waters. “While the declines are a little smaller than before and the increases are becoming larger, the total lack of direction over the last three years leaves doubt over whether the economy will recover in the near term.”

The change between the August and September BETI was the sharpest decline since May this year, whereas, the August increase over July was the highest and strongest since October 2015.

However, at 0,9% the BETI is still up compared with September last year, reminiscent to the GDP growth in 2016.

Schüssler highlights that quarterly growth remains positive overall, however, “the poor performance noted in September dropped the current quarter-on-quarter growth from 1,9% to 0,6%”. Despite the poor performance last month, he points out that the yearly and quarterly changes have both improved for three consecutive months. “The small positive trend must surely leave the door open to some hope in an economic recovery,” he says.

The average size of the economic transactions stands at only R8 205, one of the lowest transaction figures in recent history. “While there are more transactions in the economy, the value of these transactions are declining, even in nominal terms. This may be one sign that business role players are more cautious than before and highlights the uncertainty in the economy at present,” concludes Schüssler.